Brickmaker exceeds expectations as profits leap
Leicestershire-headquartered brickmaker Forterra says it anticipates its full year performance to be “slightly ahead” of expectations after seeing its revenue and pre-tax profits rise in the six months to 30 June.
The company, which is listed on the London Stock Exchange and employs 1,800 people across the UK, saw its revenue increase by 23.6% to £222.8m during the period, while its adjusted profits leapt from £27.1m to £37.3m.
In a trading update, the firm cited strong housebuilding and RMI demand as the key factors driving its performance.
Forterra CEO Stephen Harrison said: “Forterra delivered a strong performance in the first half of 2022, against the backdrop of robust market conditions. Sales volumes were slightly ahead, limited by capacity constraints rather than demand, with our factories generally operating at capacity and with inventory levels remaining at record low levels.
“We also benefited from our ability to pass on cost inflation to our customers with two price increases delivered in the period, facilitating an improvement in margins relative to 2021 as a whole.
“We continued to produce strong operating cash flows, enabling us to progress our strategic capital investment and innovation plans. Our strong financial position allows us to increase capacity, to better serve our customers; to focus on efficiency; and to reduce our carbon footprint, thus progressing our sustainability agenda.
“We anticipate current trading conditions will continue in H2, despite growing macro-economic uncertainty. The temporary closure of our Wilnecote brick factory, ongoing capacity constraints and the closure costs and inefficiencies relating to the old Desford brick factory will influence H2 performance. Despite this, the performance to date and our expectations looking forward, lead the Board to anticipate a full year 2022 result slightly ahead of the Board’s previous expectations.”
